Internet services giant Yahoo! has signed an agreement to repurchase its 40 million shares from Third Point, a US-based hedge fund owned by Daniel Loeb, for $29.11 per share, or approximately $1.2bn.
The move was part of Yahoo!’s earlier disclosed plan to purchase an additional $1.9bn of its common stock.
With this deal, Third Point will now own less than 2 per cent of Yahoo!’s stake, or approximately 20 million shares.
Yahoo!, in a statement, said that as per its board’s settlement deal signed in May last year, each of the directors, originally nominated by Third Point - Daniel Loeb, Harry Wilson, and Michael Wolf, will resign from its board, effective 31 July 2013.
The new board will include seven members, while Max Levchin, who was hired earlier as a director as part of the mutual deal between the firms, will remain on the board.
Marissa Mayer, CEO of Yahoo!, said: “Daniel Loeb had the vision to see Yahoo for its immense potential - the potential to return to greatness as a company and the potential to deliver significant shareholder value.
“On behalf of the Board and our entire team, I'd like to take this opportunity to personally thank Dan, Michael, and Harry for the tremendous opportunities they created here at Yahoo!. They have been incredibly supportive as we have built our executive staff and developed our strategy, and they have helped position Yahoo! for future success. While there’s still a lot of work ahead, they’ve given us a great foundation.”
Loeb, CEO of Third Point, said: “Harry, Michael and I are pleased to have played key roles in Yahoo's resurgence since we joined the board last spring.
“Since our Board's rigorous search led us to hire Marissa Mayer as CEO, Yahoo!’s stock price has nearly doubled, delivering significant value for shareholders. I’m confident that with Marissa at the helm and her team's focus on innovation and engaging users, Yahoo! has a bright future.”
The transaction, which will be accretive to Yahoo! earnings per share, is expected to be funded with cash.